PC sales plunge as consumers look to tablets, smartphones

Personal computer sales have plummeted as consumers embrace portable devices such as smartphones and tablets and shift to web-based software.

Worldwide PC sales experienced their worst year-on-year decline ever in the first quarter of this year, dropping 14 per cent to 76.3 million units, market researcher IDC reported earlier this month.

It was the fourth consecutive quarter of reduced shipments, and twice as bad as IDC had previously forecast.

With more and more software running on cloud-based servers, the demand on local machines has been reduced, limiting the need to keep upgrading to faster hardware.

On the other hand tablet sales are skyrocketing. Research firm Gartner reported tablet sales are expected to double in two years to next year, from 116 million last year to just under 266 million. The exponential growth is projected to continue to 468 million by 2017.

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Similarly, smartphone sales are predicted to hit 1 billion this year, up from 675 million last year.

"As consumers shift their time away from their PC to tablets and smartphones, they will no longer see their PC as a device they need to replace on a regular basis," said Gartner research vice-president Carolina Milanesi.

Joshua Real, a 27-year-old father of two from Narrabeen in Sydney, said he purchased his family PC four years ago and it could still comfortably run all of his software and games.

"I don't think it is like 10 years ago where each year new software came out which meant you needed to upgrade," he said. "I personally do most of my day-to-day web browsing on a mobile device because of the convenience and save the computer for the more complex tasks."

Troy Mcilvena, a software developer from Ballarat, said digital photo management and storage was one of the last things keeping people buying PCs rather than switching completely to mobile devices.

"Once that problem is solved for phones and tablets, PC sales will drop even faster," he said.

IDC said consumers had not warmed to the recent launch of Windows 8, which offered a radically new user interface without familiar features like the Start button. But even sales of Apple Macs are declining.

Microsoft CFO Peter Klein was this week moved to promise the next version of Windows, codenamed Blue, would take into account criticisms and focus more heavily on smaller, cheaper PCs.

Melbourne software developer John Barham said Windows 8 was an "own goal" by Microsoft: "It isn't the familiar Windows interface, and familiarity is the main reason to buy a Microsoft PC."

Chipmaker Intel's revenue from the PC business dropped 6 per cent in the first quarter this year compared to a year ago, and Microsoft's Windows sales have been flat despite the firm surprising the market this week with a 23 per cent rise in Windows revenues to $5.7 billion. Most of the increase was deferred revenue from previous periods.

Asher Moses is the Technology Editor for Fairfax Media. He started his own gadget review website more than a decade ago at age 14 and has since written for most of Australia's leading technology publications. He has twice been named Young Australian Online Journalist of the Year by the Walkley Foundation.